Commercial mortgage vs residential mortgage

[flyingsquirrel]

I want to see how difficult is it to get commercial mortgage vs residential mortgage because there is a good investment opportunity in front of me.

What is the 1% lender fee? And is it usually 6-7% instead of 2.25%?

 

[Thomas Beyer]

Define "commercial" !



A marina ? a trailer park ? an office tower ? a single bay industrial bay ? a residential land development ? A retail mall with 12+ bays ?



Lenders lend on INCOME as opposed to value usually. Rates are usually higher than residential because the risk is higher. The loan-to-value is lower, perhaps up to 70% (or lower) depending on asset class and operator experience. A single building with one restaurant or a single industrial bay or any commercial in a small town will command a lower LTV and a much higher interest rate than a 15 story office tower fully occupied in downtown Edmonton.



More details please.



yes, 1% lender fee is normal .. less % for larger loan amounts, say over $2M.

 

[flyingsquirrel]

It is actually just one unit inside a mall.

It worth around $150k.

I am planning to pay 75k and borrow 75k.

 

[Thomas Beyer]

[quote user=flyingsquirrel]one unit inside a mall. Then 5% or 6% plus would be expected. Better: PAY CASH and borrow from your own home's LOC @ prime !